updated 12/6/2007 12:42:34 PM ET 2007-12-06T17:42:34

Guests: Frank Gaffney, Kenneth Baer, Richard Cohen

CHRIS MATTHEWS, HOST:  Bush didn‘t know.  Believe it or not?

Let‘s play HARDBALL.

Good evening.  I‘m Chris Matthews.  Welcome to HARDBALL.  So who do you trust?  This fall, President Bush warned that a nuclear-armed Iran could trigger World War III.  The new national intelligence report found that Iran stopped its nuclear arms program four years ago.  Is it credible that the president didn‘t know about the information in that report when he warned about World War III in October?  We‘ll get both sides of that argument, and that question of fact, actually, in a moment.

And Republican contender Mitt Romney says keep the faith.  A new poll shows he‘s still the man to beat in New Hampshire, and tomorrow he delivers his much anticipated speech on his Mormon faith.  And in a programming note, I‘ll be anchoring MSNBC‘s live coverage of Governor Romney‘s speech tomorrow morning starting at 10:00 AM Eastern.  This could be a pivotal moment in this campaign.

Plus, a new poll shows that Republican contender Mike Huckabee isn‘t just growing just locally up Iowa, he‘s gaining strength across the nation.  We‘re going to talk about the 2008 race with Democratic presidential candidate Governor Bill Richardson, who‘s coming here.

And of course, the big question tonight, President Bush, credible or incredible?  Pat Buchanan‘s an MSNBC political analyst and is author of the new book “Day of Reckoning: How Hubris, Ideology and Greed Are Tearing America Apart.”  And Frank Gaffney‘s a former assistant secretary of the defense and now president of the Center for Security Policy.

Pat, we are led to believe that the president was given a heads-up in August that there was new developments on the Iranian intelligence front.  And the president said he didn‘t pay much attention to that heads-up and he didn‘t hear until about a week or so ago that Iran did not have a going concern to develop a nuclear weapon.  What do we make of this?  Do you believe the president really didn‘t ask the question, Hey, what‘s up?

PAT BUCHANAN, MSNBC POLITICAL ANALYST:  It is—it does not sound credible.  If the president didn‘t ask, I would be astonished at his lack of curiosity over something that important.  Secondly, the head of the CIA would have surely told Hadley, Rice and everyone else, Look, we‘ve got something big coming up, this may contradict our 2005 finding of the intelligence community.

And it was after that that Cheney and the president of the United States ratcheted up the rhetoric.  They seemed to be stampeding us to war and they were succeeding, when half the American people felt that we ought to take out Iranian nuclear facilities.  All of the Republican candidates almost were ...

MATTHEWS:  So just like the propaganda worked with regard to Iraq, it was working with regard to Iran.

BUCHANAN:  Oh, it was the same—the same program was coming up, and the Republican candidates and Hillary Rodham Clinton ...

MATTHEWS:  Let‘s take a look, and we‘ll have Frank Gaffney respond to this.  Here‘s the president on October 17 of this year, warning of a possible World War III because of Iran.

(BEGIN VIDEO CLIP)

GEORGE WALKER BUSH, PRESIDENT OF THE UNITED STATES:  If Iran had a nuclear weapon, it would be a dangerous threat to world peace.  We got a leader in Iran who has announced that he wants to destroy Israel.  So I told people that if you‘re interested in avoiding World War III, it seems like you ought to be interested in preventing them from having the knowledge necessary to make a nuclear weapon.  And I take the threat of Iran with a nuclear weapon very seriously.

(END VIDEO CLIP)

MATTHEWS:  So Frank Gaffney, the president got a heads-up there was a big new development with regard to Iranian intelligence, on their nuclear weapons system or lack thereof, in August, and there he is in October, warning of World War III because of Iran.  Do you believe the president wasn‘t informed as to the new National Intelligence Estimate before gave that speech we just saw?

FRANK GAFFNEY, CENTER FOR SECURITY POLICY:  I have no idea, Chris.  All I can tell you is there isn‘t anything that he should have changed in that speech, even if he‘d gotten this silly NIE, which I think is a silly NIE.  On the face of it, it‘s riddled with contradictions and it doesn‘t really make a whole lot of sense.  It certainly doesn‘t say what you suggested it said, which is that Iran is out of the nuclear weapons business.  It said it thinks that it halted its nuclear weapons program in 2003, which, of course, was not its position in 2005.  It had high confidence that was not the case in 2005.  But then it went on to say, you know, we don‘t know whether it‘s still stopped.

But here‘s the point.  The president is absolutely right.  The only thing I would have added to his remark is Ahmadinejad and his mullah friends are saying they want to bring about a world without America, too, that they want to bring about the end of days so that the Mahdi, the 12th imam, can return.

MATTHEWS:  Right.

GAFFNEY:  These are guys that I think we‘re right to worry about having a nuclear weapon, whether it‘s today ...

MATTHEWS:  So the fact that this ...

GAFFNEY:  ... or whether it‘s next week, whether it‘s a year or two years from now.

MATTHEWS:  So you don‘t make much of the fact that the 16 American intelligence agencies have put out a report that Iran stopped its nuclear weaponization program four years ago.  You don‘t believe it.

GAFFNEY:  I have deep skepticism ...

MATTHEWS:  You called it silly.

GAFFNEY:  ... about it.  I have deep skepticism about it because, on the face of it, it is riddled with internal contradictions.  You know, for example, you‘ve got guys over there who are saying that the covert program could be continuing.  If there‘s a covert manufacturing of highly-enriched uranium, we don‘t know about it.

MATTHEWS:  OK ...

GAFFNEY:  It could be continuing.  If it is continuing, they could be continuing a nuclear weapons program.  What does this mean?

MATTHEWS:  Well, here‘s what Dick Cheney said ...

GAFFNEY:  Certainly, you shouldn‘t be reading into it the end of the

...

MATTHEWS:  Sure.  Well, let me—let me ...

GAFFNEY:  ... program, as you suggest, Chris.

MATTHEWS:  Let me—let me read what Dick Cheney said this afternoon to the Politico Web site.  “I don‘t have any reason to question what the intelligence community has produced.  Now, there are things they don‘t know.  There‘s always the possibility that circumstances will change, but I think they‘ve done the best job they can with the intelligence that‘s available.”

That‘s what Cheney said.  He doesn‘t call it “silly.”  He said what he just said.  You call it silly, Frank.

GAFFNEY:  He has...

MATTHEWS:  Cheney, who‘s about as hawkish as you can get ...

GAFFNEY:  He has the benefit...

MATTHEWS:  ... said it was a pretty good job.

GAFFNEY:  He has the benefit of having seen the intelligence.  I haven‘t.  All I can tell you is, if I had access to the intelligence, I would be deeply troubled putting out a summary of the key judgments that these guys did, which I think render it sort of silly.

BUCHANAN:  Wait a minute, frank.  I mean, when you talk about you have real skepticism, look, you have mentioned Ahmadinejad.  Here‘s a character who does not have a missile that can hit the United States.  He does not have an atomic weapon.  He does not control the military.  He is being challenged within his own country.  His country has not fought or launched a war ever since their revolution, and the idea that we‘re being painted, is we‘ve got Hitler here, and this is 1939 in Munich, and he has atomic weapons.  This is to—this is inducing hysteria in the United States to stampede us to another war, Frank, which, clearly, there is no evidence that we have to fight.

GAFFNEY:  Well, Pat, since you are telling me what I am saying, what I am actually suggesting .

BUCHANAN:  Well, you said he‘s threatened America!

GAFFNEY:  I‘m not interested in war with Iran.  I believe the people of Iran are our best hope.  I‘m interested in helping them free themselves from this regime, and I think in a lot of ways we could be doing that without going to war.  In fact, I think going to war might make that more difficult.

But Pat, back when you were a conservative and you and I were working on missile defense, one of the things we understood is if you could bring a missile on a ship and bring it close to the shores of the United States, you don‘t need an intercontinental ballistic missile.

That‘s what the Iranians have demonstrated the capability to do.  We shouldn‘t be worrying about these guys not after they‘ve detonated nuclear weapons, but before, and this is a good time to be doing that.

MATTHEWS:  Let me get back to Pat.  I‘m sorry.  I‘m going to interrupt this ideological spate because I want to find out a couple of things.  What do you think about the following question?  Is it credible or incredible, the president‘s claim, his statement yesterday at the press conference, I didn‘t ask my intelligence man what he meant when he said there was a big breakthrough on Iranian intelligence.  I didn‘t care to ask him.  You say, Frank, you said it‘s irrelevant because it‘s a silly report.  Pat, you think it‘s incredible.

Second question.

BUCHANAN:  On its face, it‘s preposterous.

MATTHEWS:  Second question .

GAFFNEY:  I think it‘s incredible that‘s what you think is the most important angle of this story, Chris.  That‘s what I find truly incredible.

MATTHEWS:  Let me just proceed here to the second question, which you may find inappropriate.  The second question is why didn‘t Hadley, the national security director, why didn‘t somebody around the president, defense or somebody in arms control who got a heads up very clearly tell him stop making these World War III statements, stop the trumpery, the jingoism, stop the rush to war.  We don‘t have the evidence.  Why didn‘t somebody tell him that?

BUCHANAN:  Did McConnell tell Hadley?  Did McConnell tell rice?  Did McConnell tell anyone in the White House?  And if they got the information, why didn‘t they tell the president?  Chris, this is a job of the Congress.  Joe Biden ought to be holding hearings saying, look, we were almost driven to war with Iran, and we know now that they stopped this program in 2003, and people in the White House and/or the CIA knew about it.  Who knew it and when?

MATTHEWS:  Whenever you argue about the quality of this report, there were debates in congress very recently about whether we could stop the president from going to war without congressional authorization.  This was a hot issue.  In the midst of this hot debate about whether we should have a president able to go to war with Iran, the president had the access to this information about intelligence and didn‘t seek it.  I just don‘t get it.

GAFFNEY:  Look, here‘s my take on it.  The president, based on a lot of whipping on the side of his head that he has gotten from folks like you, has taken a skeptical view of these intelligence reports.  He has got an intelligence report in front of him that flips completely what he was told two years ago.  I wouldn‘t embrace this thing automatically.  I wouldn‘t say that this is necessarily the end all and be all.  Why, among other reasons, because the intelligence community doesn‘t simply get it wrong when it‘s overstating the threat.  We have seen, as in when they underestimated how close Saddam Hussein was originally to nuclear weapons back in—before Desert Storm, they underestimated, too.  Intelligence is not a gotcha game.  We ought to be taking this seriously yet.

MATTHEWS:  Tens of thousands of people now dead because we got it wrong last time.

GAFFNEY:  No, we didn‘t get it wrong last time, Chris, but that‘s another story.

MATTHEWS:  We did get it wrong.

GAFFNEY:  Millions of people dead because we‘re going to get it wrong now thinking Iran is not a problem.  You are misreading this, and you are misrepresenting it.

BUCHANAN:  Frank, what is the justification, however, if the CIA has got a different story?  What is the justification for ratcheting up the rhetoric World War III and nuclear holocaust at the very moment the CIA is backing away from all that.  What justifies that rhetoric now?

GAFFNEY:  The question is not cause and effect here.  The question is the president doing his job telling the truth to the American people about how dangerous a world this will be if the mullahs in Iran who want to bring about the apocalypse, who say so, have nuclear weapons?  I think the president is doing his job.

Now, the question is will he be prevented from doing his job in the future by what is A, I believe, an ill considered, ill advised, and incomplete assessment of this?  I think we need a second opinion on this, much as team B, something you supported, Pat, if I recall directly back in the Cold War, and the Rumsfeld commission on the missile threat.

BUCHANAN:  Did you call for a team B in the 2005 report to really check out whether they were really driving for weapons?

GAFFNEY:  I did not.  It didn‘t seem to me that was necessary because it seemed to me that‘s about right.  But here it would be useful to have one.  You can bet that other people .

MATTHEWS:  Team B, by the way is like a doctor—team B is like a patient going to a doctor and asking for a second opinion.

GAFFNEY:  You bet it is.  That‘s what is in order here.  We need a second opinion.

MATTHEWS:  The first doctor says you are sick.  The second doctor it is you are ugly.  That‘s the second opinion.  Thank you very much.  Thank you, Pat Buchanan.

GAFFNEY:  Thank you.

MATTHEWS:  Gaffney, you are great.  You are a hard warrior, sir.

Coming up, with Mitt Romney losing ground in the polls, and he is set to make a big speech about his Mormon faith.  Is there anything he could say right now to convince some evangelicals who are wary about his religious beliefs?

And later, Democratic presidential candidate Bill Richardson will be here.  This is HARDBALL only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL.  Tomorrow Mitt Romney hopes to bolster support in Iowa, particularly among those four in 10 evangelical Christians out in that state by talking about his Mormon faith.  David Shuster has the big story tonight.

(BEGIN VIDEOTAPE)

MITT ROMNEY, ® PRESIDENTIAL CANDIDATE:  Wow.  Hi, Mary.  How are you?

DAVID SHUSTER, MSNBC CORRESPONDENT (voice-over):  As Mitt Romney prepares to speak about his Mormon faith, he is not getting any help from his top Republican rival in Iowa, Mike Huckabee, who was passing up opportunities to say Mormonism is not a cult.

UNIDENTIFIED FEMALE:  There are evangelicals who think that Mormonism is a cult.  That it is not a legitimate religion.  What do you think?

MIKE HUCKABEE, ® PRESIDENTIAL CANDIDATE:  I don‘t think it‘s relevant to the presidency.  I really don‘t.  You know, I get all—I‘m so sorry.  I get all the questions about, you know, somebody else‘s religion.  I only want to address the ones about my own.

GEORGE STEPHANOPOULOS, ABC NEWS CORRESPONDENT:  Is Mitt Romney a Christian?

HUCKABEE:  You know, Mitt Romney has to answer that.  Nobody can answer for another person.  For you.  For me.  We all have to personally answer for what our faith is.

SHUSTER:  Huckabee is a former Baptist minister who has been urging Christians to vote for him.  His latest television ad says .

HUCKABEE:  Faith doesn‘t just influence me.  It really defines me.  I don‘t have to wake up every day wondering, what do I need to believe?

SHUSTER:  Earlier this summer Romney seemed to believe he could appeal to values voters with this.

ROMNEY:  And I get tired of people who are holier than thousand because they‘ve been pro-life longer than I have.

SHUSTER:  But the questions about Romney‘s Mormonism have been lingering for months.  In a radio interview this summer, during the commercial break he appeared to lose his cool when the interviewer argued Romney‘s original position on abortion rights had been inconsistent with his Mormon beliefs.

ROMNEY:  No, my religion is for me and how I live my life.  It—it tells me—my church, the leaders of my church, who I know well and who I have been a leader in my church says with the same vehemence that we have our own beliefs, we also vehemently believe other people should be able to make their own choices.  They make their own choices and have free - so don‘t—don‘t confuse—don‘t confuse what I do as a member of my faith with what I think should be done by everybody.

SHUSTER:  A few weeks ago on CBS, Romney, again, faced questions.

UNIDENTIFIED MALE:  Do you take literally the teachings of your church?

ROMNEY:  I do.  I‘m not going to try and distance myself in any way, shape, or form from my faith.

SHUSTER:  But a minute later he added .

ROMNEY:  My church wouldn‘t endeavor to tell me what to do on an issue, and I wouldn‘t listen to them on an issue that related to our nation.

SHUSTER:  The intersection of religion and politics has long been examined by Hollywood.  In the movie classic “The Gentleman‘s Agreement” Gregory Peck‘s character offers a lesson to his son.

GREGORY PECK, ACTOR:  Religion, like the Jewish or the Catholic or the Protestant religions.  It doesn‘t have anything to do with the flag, or the uniform or the airplanes.  You got it?

UNIDENTIFIED MALE:  Yep.

PECK:  Don‘t ever get mixed up on that.

UNIDENTIFIED MALE:  I got it.

SHUSTER:  But throughout American history it‘s never been that simple.  In 1928 Al Smith, a Democratic governor of New York, became the first Roman Catholic to win a presidential nomination.  But his Catholicism was an issue in the general election, and he lost to Republican Herbert Hoover.  In 1960 John Kennedy put some distance between himself and his Catholicism in a major speech to Baptist ministers in Texas.

JOHN F. KENNEDY, FORMER PRESIDENT:  So it is apparently necessary for me to state once again, not what kind of church I believe in.  For, that should be important only to me.  But what kind of America I believe in.  I believe in an America where the separation of church and state being absolute.

SHUSTER:  Jimmy Carter in 1976 took a different approach, embracing his Christianity repeatedly during the campaign.  George W. Bush did as well seven years ago.  Just months before the caucuses and primaries began, then candidate Bush was asked to name his favorite philosopher.

BUSH:  Christ.  Because he changed my heart.

SHUSTER (on camera):  Bush, like Carter, was embracing a faith and his tens of millions of followers.  The problem for Mitt Romney is that Mormonism is different.  An issue that his top rival Mike Huckabee has been underscoring for Iowa‘s Republican voters.  I‘m David Shuster for HARDBALL in Washington.

(END VIDEOTAPE)

MATTHEWS:  Thank you, David.

Richard Cohen is a syndicated columnist for the “Washington Post” and Kenneth Baer worked as a speechwriter for Vice President Gore and advised the Gore-Lieberman campaign in ‘00.

Let me go back to Richard Cohen.  Everybody in Washington loved your column yesterday in “The Washington Post.”  At least everybody I talked to.  You basically made the point that we shouldn‘t be having—well, you are with the Constitution on this one.  We shouldn‘t be having a religious test.  Is that what you want to tell us now?  Is that the issue here?

RICHARD COHEN, “WASHINGTON POST”:  That‘s absolutely right.  I mean, I find it unbelievable that Mitt Romney is going to give a speech either explaining or defending his religion.  I don‘t know what his religion has to do with his capacity to be president of the United States.  I don‘t see anything about Mormonism that makes me in the least bit worried.  This is an issue that is totally removed at this point and divorced from governance, and Mike Huckabee is using this thing and it‘s a blatant appeal to religious prejudice to get ahead in Iowa.

MATTHEWS:  Let me take a look.  We all should look at it.  Here is John F.  Kennedy, a bit of his speech to the Houston ministers who were adversarial to him in 1960.

(BEGIN VIDEO CLIP)

J.F. KENNEDY:  But contrary to common newspaper usage, I am not the Catholic candidate for president.  I am the Democratic Party‘s candidate for president who happens also to be a Catholic.  I do not speak for my church on public matters, and the church does not speak for me.  Whatever issue may come before me as president, if I should be elected, on birth control, divorce, censorship, gambling or any other subject, I will make my decision in accordance with these dues, in accordance with what my conscience tells me to be in the national interest and without regard to outside religious pressure or dictates, and no power or threat of punishment could cause me to decide otherwise.

(END VIDEO CLIP)

MATTHEWS:  Ken, why doesn‘t Mr. Romney say the same thing?  My religion is my business.  It‘s not your business.  Your business is who runs this country and how it‘s run.  The Constitution is your issue if you are a voter, not the Bible.

KENNETH BAER, FORMER GORE-LIEBERMAN SPEECHWRITER:  If only it were so.  The problem is is that Mitt Romney is trying to run for president as a religious American trying to win the support of the religious social conservatives.  He has painted himself in this corner here where he doesn‘t want people to ask questions about his private beliefs, and I think Richard is right, nor should we, but at the same time he is running on it and making it an issue, and since he has made it an issue, I think maybe there‘s some explanation.

MATTHEWS:  So the separation of church and state is not absolute, as Kennedy put it?

BAER:  You know, that‘s a belief.  I believe in separation of church and state.  He doesn‘t want it to be.

MATTHEWS:  So he is caught?  What do you think of that, Richard, that Romney has sort of cooked himself into this situation by talking so much about family values, his belief as a man of faith?  He has sort of ran on this issue.

COHEN:  Yeah, I mean, the Republican Party in general has painted themselves into this corner.  You can go back to 2000 when Bush cited Christ as his favorite philosopher, and the next person up, I think, was Orrin Hatch who outdid bush in terms of what Christ meant to him.  And Hatch is a Mormon.  You know, these people have been playing in game for a long time now, and now we‘re starting to set up a religious test for the presidency.

This is very, very dangerous stuff and it doesn‘t belong in there.  Kennedy, in a sense, almost had it easy because he had to rebut a canard and that was he of all people wouldn‘t take instruction from the Vatican.  Well, Romney has to talk about his beliefs.  I mean this is something in his head, not his behavior, and that‘s almost impossible to do.  What is he supposed to do, renounce his religion?  He is not going to do that.

MATTHEWS:  Well, that‘s a good question.  Ken, I mean, John Kennedy would have never given a discussion to anybody about transubstantiation or exorcism or the Trinity.  Or any of the doctrines of the Catholic Church.  My church.  He wouldn‘t have—it‘s not the subject of a secular discussion because it‘s only for the believers to discuss.

BAER:  And Mitt Romney shouldn‘t do that.  In fact, if he did do that, he would end up getting into very dangerous territory.

MATTHEWS:  So what can he do?

BAER:  I think he can get out there and he is going to talk about the values that he shares and the values that—public values that his faith and all faiths in mainstream America do share.  That‘s what he should try to do.  Unfortunately, again, I really think he put himself in a corner.  He is trying to appeal to a group of evangelical and social conservatives that has a bias against him.  And he‘s actively going against them.  It‘s a difficult situation to be in.  More difficult in many ways than Kennedy or Jimmy Carter faced.

MATTHEWS:  Could he say accept me as a Republican conservative—a newly discovered conservative, if you will, but not as a Mormon?  I‘m not asking you to accept me as a Mormon.  I‘m simply asking you to accept me as an American politician running for an office?  Can‘t do you that?  Can‘t you separate me from my religion?

BAER:  I hope they could.  I mean, that‘s the difference in my party, the Democratic Party.  You know, the majority leader of the Senate is Mormon, and we‘ve done that, and there‘s no problem there.

MATTHEWS:  Well, maybe - Richard, let‘s take a look at what Jimmy Carter said back in 1967 in that well known, if not notorious “Playboy” interview.

(BEGIN AUDIO CLIP)

JIMMY CARTER, FORMER PRESIDENT:  The Bible says, “Thou shalt not commit adultery.  Christ said, I tell you that anyone who looks on a woman with lust has in his heart already committed adultery.  I‘ve looked at a lot of women with lust.  I‘ve committed adultery in my heart many times.  This is something that God recognizes that I will do and have done and God forgives me for it.

(END AUDIO CLIP)

MATTHEWS:  The trouble is there, Richard, what makes it complicated was Jimmy Carter was playing to the Bible Belt as part of the Bible Belt.  He was playing to the home crowd, and he was using religion to his advantage to beat the Republicans.

COHEN:  Well, that‘s right.  Carter was coming on as pure as the driven snow in opposition to the Nixon administration, which had almost directly preceded him.  Chris, you know what I would like to see.  I would like to see some other Republican take on this issue.  I mean, another Republican presidential candidate and say it doesn‘t belong.  I would like to see John McCain step up to the bat or Rudy Giuliani, and I would like to see some prominent Protestant clergymen take the position and say this does not belong in a presidential race.  I don‘t know where the Protestant clergy is on this.  They‘ve just faded.

MATTHEWS:  I was hoping that somebody would raise their hand the other night in that CNN debate and say this is a religious test for office.  I‘m not going to tell you how literal I take the Bible.  I‘ll talk to you about how literal I take the Constitution.  You have just violated Article VI of the U.S. Constitution, and if you Republicans are strict constructionists as the way you say you are, stop breaking the Constitution.  Richard, great column.  Richard Cohen of “The Washington Post”, syndicated around the country.  Kenneth Baer, thank you, sir, with your Democratic roots, you are north nonetheless helpless in this Republican debate.

Up next, Romney gives his groundskeepers the ax.  He just fired the guys who cut his lawn because they‘re from another country, and Bill Clinton slams the media.  You are watching HARDBALL only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL.  Let‘s look at what else is going on in politics.  And remember this back and forth from last week‘s Republican debate?

(BEGIN VIDEO CLIP)

RUDY GIULIANI, ® PRESIDENTIAL CANDIDATE:  It was even a sanctuary mansion.  At his own home, illegal immigrants were being employed.

MITT ROMNEY, ® PRESIDENTIAL CANDIDATE:  If you hear somebody with a funny accent, you as a homeowner are supposed to go out there and say I want to see your papers?  Is that what you‘re suggesting?

GIULIANI:  You are going to take the (inaudible) attitude that you are perfect on immigration.

ROMNEY:  I‘m not perfect.

GIULIANI:  It just so happens you have a special immigration problem that nobody else here has.  You are employing illegal immigrants.  That is a pretty serious thing.  They were under your nose.

(END VIDEO CLIP)

MATTHEWS:  Well, “The Boston Globe” now reports that the company Romney hired to cut his lawn still has illegals working for them, three men from Guatemala in the country illegally. 

Romney, covering himself from being caught now a second time, has just sent out a letter, which he dramatically released to the press, ending his deal with the lawn-cutting company. 

Here‘s the odd part.  Romney repeats twice in this letter firing the company that the Guatemalans—quote—“are not permitted to work in the United States”—close quote.

Why didn‘t he just admit that these men are in the country illegally?  Why is he quibbling over their work status, when they have no right to be here at all? 

After getting caught twice with the same problem, you would think he would cut his losses and stop trying to say he just didn‘t have the paperwork right. 

Up in New Hampshire, Bill Clinton is out there riding the raft.  Here is acting the role of media critic, when the real problem, of course, is that he blew it last week trying to... 

(BEGIN VIDEO CLIP)

BILL CLINTON, FORMER PRESIDENT OF THE UNITED STATES:  I saw an article about 10 days which said—which analyzed the press coverage of this election. 

One percent of the press coverage was devoted to their record in public life.  No wonder people think experience is irrelevant.  A lot of the people covering the race think it is. 

Fifteen percent was devoted to their life stories.  That‘s legitimate.   We all want to know about people who want to be president.  Seventeen percent was devoted to their proposals for the future, and 67 percent of the coverage was pure politics.  Stuff that has a half-life of about 15 seconds, won‘t matter tomorrow, is very vulnerable to being slanted and moved, and it won‘t affect your life.

(END VIDEO CLIP)

MATTHEWS:  What Clinton is really doing here, which everyone can see but him, is deny the undeniable, that the press he‘s mad at committed the unforgivable sin of videotaping what he said about being an Iraq war opponent, something he wasn‘t, and playing that videotape on television again and again. 

By the way, we‘re going to keep showing that tape where Bill Clinton claims to be against the war with Iraq from the beginning. 

And now the HARDBALL “Big Number” tonight.

Mike Huckabee is the “it” guy, of course, in the presidential race right now.  He‘s surging in Iowa and creeping up in some national polls.  Huckabee himself admits that he‘s under more scrutiny now, but this report by the Politico Web site doesn‘t give us the impression that he‘s taking the scrutiny seriously. 

Look at this exchange at a dinner with Huckabee and reporters Tuesday night this week. 

The reporter: “I don‘t know to what extent you have been briefed or been able to take a look at the NIE report that came out yesterday.”

Quote—Huckabee: “I‘m sorry?”

Reporter: “The NIE report, the national intelligence estimate on Iran. 

Have you been briefed or been able to take a look at it?”

Huckabee: “No.”

Reporter: “Have you heard of the finding?”

Huckabee: “No.”

And that‘s after about two days of discussion of this issue that Iran is not posing a nuclear threat to us right now.  Big news:  He wasn‘t getting it.  It reminds me a little bit of the president and Katrina. 

And that‘s tonight‘s HARDBALL “Big Number”: 31.  That‘s the number of hours that elapsed between the NIE release on Monday and Huckabee saying he hadn‘t heard about it on Tuesday night, 31 hours.  So, who is briefing Huckabee, the front-runner, now?  The same guys who briefed Bush on Katrina? 

Up next, I will ask Democratic presidential candidate Bill Richardson whether he thinks President Bush has a credibility problem on Iran. 

You‘re watching HARDBALL, only on MSNBC.  

(COMMERCIAL BREAK)

MARGARET BRENNAN, CNBC CORRESPONDENT:  I am Margaret Brennan with your CNBC “Market Wrap.”

Stocks surged amid signs of some strengths in the economy.  The Dow Jones industrial average gained 196 points.  That‘s more than a 1.5 percent gain on the day—the S&P 500 up 22 -- tech stocks also seeing a nice, almost 2 percent, gain of 46 ½ points. 

Among the positive economic news, worker productivity surged in the third quarter, at the strongest rate in four years.  There‘s also word that the economy added a much-larger-than-expected 189,000 jobs in November.  The government‘s official employment report will be released this Friday morning.

And the Bush administration has reportedly worked out an agreement with the mortgage industry to freeze interest rates on subprime mortgages for five years, those so-called teaser rates.  The deal is aimed at preventing a jump in foreclosures.  President Bush is expected to announce that agreement and its details tomorrow. 

And oil prices slipped again, even though OPEC decided to—at a meeting today, to keep production steady.  Crude oil fell 83 cents in New York‘s trading session, closing at $87.49 a barrel.  Energy stocks, however, gained. 

That‘s it from CNBC, America‘s business channel—now back to

HARDBALL. 

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES:  The Iranians have a strategic choice to make.  They can come clean with the international community about the scope of their nuclear activities and fully accept the longstanding offer to suspend their enrichment program and come to the table and negotiate, or they can continue on a path of isolation that is not in the best interests of the Iranian people. 

(END VIDEO CLIP)

MATTHEWS:  Welcome back to HARDBALL. 

That was, of course, President Bush today still demanding that Iran disclose the full extent of its nuclear activities, despite the big national intelligence estimate that came in yesterday that Iran had halted its weapons programs back four years ago, in 2003. 

New Mexico Governor Bill Richardson is a Democratic presidential candidate right now.  He has also served as energy secretary of the United States, as ambassador to the U.N., as a U.S. congressman.  He‘s now the governor in his second term from New Mexico. 

You‘re an amazing guy. 

(LAUGHTER)

GOV. BILL RICHARDSON (D-NM), PRESIDENTIAL CANDIDATE:  Well...

(CROSSTALK)

MATTHEWS:  So, how come you‘re going 3 percent nationally right now?

RICHARDSON:  Well, no, but I‘m—in Iowa and New Hampshire, I‘m in double digits.  I‘m moving.  You know, nationally...

MATTHEWS:  Is this an upside-down race, where the people with the least claim on the presidency get the best numbers?

I mean, you got you, Dodd, Biden, all with the resumes, at the bottom. 

And, Obama, what, was he a state senator three weeks ago?  Look at him.

RICHARDSON:  Well, look...

MATTHEWS:  Huckabee, never been to Washington. 

What‘s going on? 

RICHARDSON:  Well, my point is that this race shouldn‘t be based on political pedigree, and who has the most money, and who‘s the most glamorous.  It should be on who can change this country and who has experience.

And the voters in Iowa and New Hampshire -- ®MDNM_and you know that those are the states that propel you. 

MATTHEWS:  Sure. 

RICHARDSON:  I‘m moving up slowly.  The dynamic there is different than it is nationally. 

I feel good, Chris.  I have got momentum.  I can feel it.  I can feel it when I go into those homes in Iowa and New Hampshire.           

MATTHEWS:  OK. 

Talk to me about the voter of Iowa.  Do they care about the Iraq war being in a rut?  And, yes, it‘s calm right now, but nobody says we‘re getting out of there for as far as the eye can see.  We‘re going to take casualties, a little bit sometimes, a lot later, for as long as we can imagine. 

Does anybody fear that this president still wants to take us to some kind of confrontation with Iran by demanding that they—they show what they don‘t have?  I mean, we‘re putting the same kind of demands on them now we did with Saddam before the war. 

RICHARDSON:  I want just say something, the Iowa voter is the most informed I‘ve ever seen. 

MATTHEWS:  Are they an anti-war crowd? 

RICHARDSON:  Generally yes.  They‘re not necessarily anti-war.  They

know that this war is not working.  They have been worried about what we‘re

going to do in Iran, and I think this NIE report shows that the president

is (sic) been pursuing an aggressive policy at a time when his advisers are

or he should have known about this finding.  I‘m baffled, and I‘m baffled with his reaction.  I think this is a time for diplomacy. 

MATTHEWS:  OK, you‘re president of the United States right now, governor, and you just get NIE report that says, despite everything that was said by the fear mongers, four years ago, they stopped their weapons program.  What would you do?  Would you call Ahmadinejad and say, let‘s talk, maybe we got a basis for talking now?  We‘ve been miscommunicating here? 

RICHARDSON:  Yes, I would talk to the Iranians.  I don‘t know if it would be Ahmadinejad.  I would pursue the secretary of state going to their moderate element, moderate clerics, moderate civilian leaders there.  And I would say, look, you‘re not pursuing nuclear weapons.  That‘s good.  But you are pursuing uranium enrichment.  What we will do in the west is assure you of civilian nuclear power.  We will give you the expertise to develop it. 

MATTHEWS:  So same deal—we‘re going to give you something like the deal we gave to North Korea, but with no nuclear. 

RICHARDSON:  That‘s right. 

MATTHEWS:  Alternative energy source. 

RICHARDSON:  Alternative energy source.  We‘ll give you assured customers.  Because right now, Chris, with this report, the president is trying to pursue sanctions against Iran in the U.N. Security Council, China and Russia; now that this report has come out, they‘re not going to go for sanctions. 

MATTHEWS:  Why would Iran, that has all the oil in the world, be going nuclear for energy needs? 

RICHARDSON:  Because I believe they feel that they need diversity.  And there are some elements in Iran that I do believe want to develop a nuclear capacity, a nuclear weapons capacity.  But I think the moderates have basically slowed this down.  And our policy, our saber rattling policy, has been based on the hope that they are developing nuclear weapons.  This, our intelligence agencies, 16 agencies, saying that they‘re developing enriched uranium.  You know, the reality there is that that is permitted under the non-proliferation treaty. 

MATTHEWS:  OK, here is what the president said the other day about how we were trying to play Mr. Nice guy with Iran until they brought in Ahmadinejad and now that‘s what‘s changed.  Let‘s take a look.  He said we were doing the soft sell up until 2005.  Let‘s watch. 

(BEGIN VIDEO CLIP)

BUSH:  You might remember that I have consistently said that we will be at the table with the EU Three if Iran would verifiably suspend their program.  And the offer still stands.  What changed was the change of leadership in Iran.  We had a diplomatic track going.  And Ahmadinejad came along and took a different tone.  My hope is that the Iranian regime takes a look at their policies and changes their policies back to where we were prior to the election of Ahmadinejad, which was a hopeful period. 

(END VIDEO CLIP)

MATTHEWS:  A hopeful period; we were on a diplomatic course for four years.  We were calling them the axis of evil.  We were calling the government evil and he‘s saying—is that inaccurate what he just said?  I think it is.  Do you think that was inaccurate what he just said?

RICHARDSON:  It is inaccurate because the report says that by the year 2003 that they had suspended their nuclear weapons program, that they were enriching uranium.  What that report also says, the intelligence report, is that, in the judgment of our intelligence agency, Iran would respond to a carrot and stick policy.  That means diplomacy. 

This is the time to seek an unconditional dialogue with Iran.  It would be tough.  Now I wouldn‘t go to Ahmadinejad.  I would go to more moderate elements.  I would bring the European.  I would bring the United Nations and say let‘s make a deal on two issues; one, on nuclear weapons, no nuclear weapons, but a civilian nuclear capacity.  There is another element, we want them to stop fomenting terrorist elements in Iraq.  That is a second issue. 

MATTHEWS:  You think, based upon your knowledge of foreign policy—do you really think Ahmadinejad is really calling the shots over there?  People tell me it‘s Khomeini at the top, the top guy? 

RICHARDSON:  I don‘t think Ahmadinejad is calling the shots.  In fact, I think he‘s been discredited.  He‘s a hard-line element.  There‘s no question about it.  But this is why it‘s important to open a dialogue, to kind of give the Ahmadinejads a push aside, so we can negotiate with more moderate elements. 

MATTHEWS:  Every time you guys talk like this, Hillary Clinton says you want to talk to a Holocaust denier.  She puts the attack dog out, Wolfson, to go after you guys and say, you want to sell out to the enemy, to Hitler. 

RICHARDSON:  She was wrong to wrote for that Iranian resolution, so was the entire Senate.  Why bring something like that up?  I think if we‘re going to get out of Iraq, and we should -- 

MATTHEWS:  So you don‘t want to be her running mate? 

RICHARDSON:  No, I don‘t want to be her running mate. 

MATTHEWS:  Because you‘re tough on her tonight, but you‘re usually pretty supportive of Hillary. 

RICHARDSON:  I just simply said at one debate that we should not be negative, that we should not attack each other‘s character. 

MATTHEWS:  But that offends people like me when people say that. 

RICHARDSON:  No, because you‘re a newsman.  You want a fight.  We want to win the election.  What I‘m simply saying, Chris, is the American people want us to be positive.  The American people want us to propose solutions, not throw mud at each other.  Certainly, the voters in Iowa and New Hampshire are doing that. 

MATTHEWS:  You would be a great diplomat.  You seem to understand the business and you keep bringing them back alive.  You went and buried the guy the other day.  It was very nice of you to go to that.  You care about people, I will give you that.  I would like to give you ten more points in the polls. 

RICHARDSON:  I know I‘m a good diplomat.  But I will be a good president.  You watch, I‘m going to win this thing.  You watch. 

MATTHEWS:  This is one of the nice guys in politics, Bill Richardson. 

We wish you well, for all that‘s worth.

Is the Mike Huckabee craze going nationally?  The round table is next. 

The is HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  Amazing news keeps pouring in the door tonight.  We‘re back now with the round table, “Newsweek‘s” Holly Bailey is covering the campaign out in Iowa.  That‘s where she is right now.  The “National Journal‘s” Ron Brownstein, best in the business; he‘s the author of “The Second Civil War.”   And Joan Walsh, my colleague out there from “Salon” out in San Francisco. 

Take a look at this new national poll, brand new poll, just off the wires right now.  Here it is, Hillary, up in New Hampshire—we‘re looking from Iowa to New Hampshire already.  Look at this, not only is Obama challenging her in Iowa—look at these numbers, 35 Hillary 29 Obama, 17 Edwards.  Bill Richardson is at 10.  That is getting so close.  If I were her, I would be saying I could lose two in a row here.  Ron Brownstein?

RON BROWNSTEIN, “THE NATIONAL JOURNAL”:  First of all, New Hampshire was always fertile ground for Barack Obama, in that the electorate tends to be more upscale, more college educated, and more independent, all good things for him.  There were other polls out today that had Hillary Clinton with a larger lead in New Hampshire, but they all say the same thing, which is that Obama is within reach sufficiently that if wins Iowa he will be a real threat in New Hampshire. 

MATTHEWS:  What kind of a bounce do you assume based upon history?  It‘s only a five day difference.  It‘s so tight.  It‘s barely even a couple of newspapers you read, or magazines and TV shows.  All of a sudden—Do people really shift that fast? 

BROWNSTEIN:  The history of Iowa influencing New Hampshire isn‘t perfect, especially on the Republican side.  But now you have—in the past, the wave could crest and recede by the time the vote actually came.  Now, with a five-day window, the potential is there for a bigger impact.  But the underlying truth is that it is good kindling for Obama, no matter what.  It is a very upscale, very independent electorate.  It is a place where he should do well.  All these polls are telling Hillary Clinton that if he does do well in Iowa, she is going to have to draw the line in the sand and fight back. 

MATTHEWS:  Holly Bailey, what do you think of these new numbers that show him within six points in New Hampshire now?  We already see a nail biter developing in Iowa.  It looks like this could be a daily double here for Barack? 

HOLLY BAILEY, “NEWSWEEK”:  Well, I‘m not surprised to see the numbers tightening.  As we saw the numbers last week when I was on, I‘m really curious about where independent voters are going in New Hampshire.  They are always the ones to watch, the voting block.  When we‘ve looked at previous polls in the past couple of month, Barack Obama has always done incredibly well with independent voters.  So I‘m curious to see what that breakdown is now. 

MATTHEWS:  OK, I can‘t hear you.  I can‘t hear Holly.  Let me go right now to Joan Walsh.  Joan? 

JOAN WALSH, SALON.COM:  Well, I think it‘s the time of year that people are really tuning in and paying attention.  It‘s not surprising that the polls are tightening, Chris.  I think it‘s interesting to think about what all this means for John Edwards.  I was intrigued by the “Time” story this morning that said Edwards is sitting back and starting to smile.  He‘s the sunshine kid because Hillary and Obama are going after each.  He doesn‘t have to.

So it could also be that they batter each other and he potentially benefits from those other candidates who are not going to get their 15 percent in the Iowa caucuses.  So I think it‘s tightening in a lot of different ways.  It‘s just fascinating. 

MATTHEWS:  What I‘m seeing here is the tightening of the country.  I keep seeing not just Iowa being a nail biter in both parties, with Romney and Huckabee on the other side—we‘ll talk about that in a minute—but clearly Obama and Hillary on the Democrat side.  The same thing is happening in New Hampshire.  We live in such a small global village now— and Hillary is right, it takes a village.  All of a sudden, the national numbers are closing now on the local numbers.  What happens in Iowa, doesn‘t stay in Iowa. 

We‘ll be right back with the round table to talk about Romney and the Republicans.  You‘re watching HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  We‘re back with the round table.  Well, Mike Huckabee‘s rise is reflected nationally.  As I just said, it‘s not just in Iowa.  What happens in Iowa doesn‘t stay there.  Here he is now.  Look at this.  Just hold these numbers up here, please.  Look at these numbers.  Here‘s a guy that back in October was down at seven percent, the back of the field, behind Thompson, behind McCain, behind Mitt Romney.  Now he is ahead of all those people.  He‘s now right behind Giuliani and closing on him, if you look at these numbers. 

It doesn‘t take much math to project that he could overcome Giuliani fairly quickly.  Let me go back right now to Holly on that one.  Holly, this is a dramatic kick here, as we say in racing. 

BAILEY:  Absolutely.  I can tell you I was traveling with Mike Huckabee around Iowa this weekend.  It was nuts.  Every town meeting he went to was overflowing.  The number of reporters and cameras traveling with him had tripled.  It was nuts.  So to see his rise in the polls, I think he‘s as personally shocked as anybody. 

MATTHEWS:  Are the people around him—I know it‘s hard to read the audience without a little bit of inspection and reporting.  But are they largely evangelical conservatives?   

BAILEY:  Well, you know, the interesting thing about town halls is that he wasn‘t getting a lot of questions about religion.  But one thing happened here this week that was pretty interesting.  It wasn‘t on his public schedule, but Monday night he met with a lot of—a big gathering of Iowa pastors.  And the campaign tried to keep it quiet and the organization itself tried to keep it really quiet and kicked reporters out. 

The fact is that he definitely is aiming for that voting block here.  But he tries to say that he is also trying to woo other blocs, people that care about education and health care as well. 

MATTHEWS:  Well, everybody thinks he‘s a nice guy, and he certainly has a nice manner when he‘s around here.  But you know, Joan, it seems to me a nice guy would have given a guy a pass on whether he‘s a Christian or not if he said he was a Christian.  If someone says I‘m Jewish, you say, OK, you‘re Jewish.  If someone says I‘m a Christian, you say, OK, you‘re a Christian.  He wouldn‘t give that to Romney.  Somebody asked him just the other day, do you think Mormonism is a cult?  He said, I don‘t want to talk about.  He let that knife go in, too.  He is playing this thing very tough, despite all the velvet glove. 

WALSH:  He absolutely is.  This is his strategy, Chris.  He is playing to the Christian right.  But, you know, Mike Huckabee might have really crested, at this point.  He has had a very bad day.  You showed he didn‘t know what the NIE was or that it was released.  He is not very schooled on foreign policy.  And he is suffering today with the ABC News and “Huffington Post” reports about the Wayne Dumont (ph) case, the rapist and murderer who was paroled. 

The issue with that is that he is not very schooled yet at answering tough questions.  He has gotten kind of a free pass from the media, and that has stopped.  Let‘s see how he faces up to this. 

MATTHEWS:  Ron, when is the balloon going to get popped?   

BROWNSTEIN:  A month is a long time to hold a lead without a lot of money or organization.  Second, the real story in the Republican race in that poll, no one at 25 percent.  The race fragments rather than consolidates as it moves forward.  It really is as wide open as any presidential contest has been this close to the first vote. 

MATTHEWS:  Is it possible we‘re going to a convention next year in St.

Paul? 

BROWNSTEIN:  Probably not.  But we have a lot of ups and downs and a roller coaster. 

MATTHEWS:  How does anybody get 50 percent in this race? 

BROWNSTEIN:  You know, it‘s going—through the demolition derby. 

It‘s a NCAA kind of format now, regionals before we get to the finals.   

MATTHEWS:  OK, maybe it‘s (INAUDIBLE).  Anyway, thank you, Holly Bailey.  Thank you, Ron Brownstein.  Thank you, Joan Walsh.  Tomorrow morning, I‘ll anchor MSNBC‘s live coverage of Mitt Romney‘s speech on his Mormon faith.  We‘ll be on at 10:00.  Then join me for HARDBALL tomorrow night at 5:00 and 7:00 Eastern. 

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

END   

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